GBP/USD slides to multi-day lows, further below mid-1.3500s

GBP/USD witnessed some follow-through selling for the second consecutive session on Monday.
COVID-19 jitters benefitted the USD’s safe-haven status and exerted some pressure on the pair.
A sustained break below an ascending trend-line would pave the way for additional weakness.

Haresh Menghani FXStreet

The GBP/USD pair lost some additional ground during the early European session and dropped to fresh multi-day lows, around the 1.3535 region in the last hour.

The pair extended previous session's retracement slide from the 1.3700 mark, or multi-year tops and witnessed some follow-through selling on the first day of a new trading week. The prevalent cautious mood benefitted the US dollar's relative safe-haven status and was seen as a key factor dragging the GBP/USD pair lower for the second consecutive session.

Investors remain concerned about the potential economic fallout from the continuous surge in the number of new COVID-19 cases. The worries were further fueled by Friday's disappointing US monthly Retail Sales figures for December, which, to a larger extent, offset better-than-anticipated Chinese GDP growth figures for the fourth quarter of 2020.

Meanwhile, the British pound was further pressured by the imposition of fresh restrictions in the UK and failed to gain any respite from the optimism over the rollout of COVID-19 vaccines. In fact, the UK vaccine deployment minister, Nadhim Zahawi said that everyone will be offered a vaccine by September, albeit did little to impress the GBP bulls.

Looking at the technical picture, repeated failures near the 1.3700 mark constituted the formation of a multiple-top pattern and could be seen as the first sign of bullish exhaustion. The subsequent pullback has now dragged the GBP/USD pair to a near one-month-old ascending trend-line support, which if broken decisively will set the stage for additional weakness.

There isn't any major market-moving economic data due for release on Monday, either from the UK or the US. Hence, developments surrounding the coronavirus saga will play a key role in influencing the broader market risk sentiment and the USD price dynamics. This should provide some impetus to the GBP/USD pair and produce some short-term trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price	1.3538
Today Daily Change	-0.0046
Today Daily Change %	-0.34
Today daily open	1.3584

Trends
Daily SMA20	1.3567
Daily SMA50	1.3426
Daily SMA100	1.3204
Daily SMA200	1.2914

Levels
Previous Daily High	1.3698
Previous Daily Low	1.3572
Previous Weekly High	1.371
Previous Weekly Low	1.3451
Previous Monthly High	1.3686
Previous Monthly Low	1.3134
Daily Fibonacci 38.2%	1.3621
Daily Fibonacci 61.8%	1.365
Daily Pivot Point S1	1.3538
Daily Pivot Point S2	1.3492
Daily Pivot Point S3	1.3412
Daily Pivot Point R1	1.3664
Daily Pivot Point R2	1.3744
Daily Pivot Point R3	1.379

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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